DBRS Publishes Finalised Rating and Monitoring Covered Bonds Global Methodology and Market Value Spreads Addendum

DBRS finalised its “Rating and Monitoring Covered Bonds Global Methodology” (the Methodology) and “Rating and Monitoring Covered Bonds Addendum: Market Value Spreads” (the MVS Addendum).

The Methodology presents the criteria for which covered bond ratings are assigned and/or monitored globally.

The Methodology supersedes the existing “Rating Canadian Covered Bonds” and “Rating European Covered Bonds” methodologies published on 23 April 2018 and 6 December 2018, respectively, and the MVS Addendum supersedes the existing “Rating European Covered Bonds Addendum: Market Value Spreads” published on 6 December 2018. The Methodology and MVS Addendum are effective as of 28 June 2019.

DBRS did not receive any comments on the Methodology or MVS Addendum. A footnote was added in the MVS Addendum clarifying that DBRS would review the market value spreads for public sector exposures of Germany, the United States and Norway in line with any changes to their sovereign ratings. No other changes have been made subsequent to the versions published on 2 May 2019. As noted in the 2 May 2019 press release, DBRS does not expect any rating impact on any of DBRS’s outstanding covered bond ratings as a result of the publication of the Methodology and MVS Addendum.

DBRS also published a commentary titled “DBRS’s Assessment of Jurisdictions for which Covered Bonds are Systemically Important” which includes its assessment on the jurisdictions for which covered bonds are a systemically important financing instrument, considering the level of outstanding covered bonds, issuance levels and the established legal frameworks in each country. DBRS believes that Canada is currently one such jurisdiction, and has added it to the list of countries including Denmark, Germany, Ireland, Italy, France, Spain and Sweden.

DBRS publishes on its website all comments received, except in cases where confidentiality is requested by the respondent.

Notes:
DBRS methodologies are publicly available on its website www.dbrs.com under Methodologies & Criteria.

For more information on this methodology, or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.